TDC acquires Norway’s Get
September 16, 2014
By Colin Mann
Danish quad-play operator TDC Group is acquiring Get AS, the second largest cable-TV provider in Norway, for NOK 13.8 billion (€1.68 bn), to create Scandinavia’s largest cable TV company in terms of revenue. With 1.7 million connected homes and a revenue of DKK 7 billion (€0.94bn) from the cable business, the TDC Group says it will become the leading communication and home entertainment company in the region.
“The acquisition of Get is TDC Group’s most significant investment in many years. We have awaited this opportunity and see it as a natural and timely extension of our business and it marks an evolution of TDC Group into a leading Scandinavian provider of TV, home entertainment and high speed broadband on the cable platform. It is also a strategic move into the consumer market in Norway within an industry we know very well from having run our YouSee cable business in Denmark successfully for years,” said Carsten Dilling, President and CEO.
Get serves more than 500,000 households and is the fastest growing and most profitable provider on the Norwegian market.
Through the Get acquisition, the cable business of TDC Group will increase to a total of 1.7 million connected households, up from the present 1.2 million in the YouSee brand. A total of 29 per cent of TDC Group’s revenue (2013 figures) will derive from the cable business and this share is expected to grow.
“Get is a well-run business with world class, innovative products. It operates in an attractive market with large growth potential. This growth is underpinned by the very strong economy in Norway. With 2005 as the only exception Get has had two-digit growth rates since 2000 and is today among the most profitable on a European scale. The acquisition strengthens our cable TV business on a Nordic level as well as ensures a very strong presence on both the business and the consumer market in Norway for TDC Group”, explained Dilling, who suggested the pair were “an excellent match”, both from a technical infrastructure perspective and also with respect to the commercial approach each management team brings to the business.
TDC Norway owns a fibre based transmission network and focuses on large scale business customers. Get owns a widely distributed cable-TV network that combined with partner networks passes more than 0.7 million households and Get primarily focuses on consumers and small and mid-size business customers.
“TDC Group and Get fit very well together. Get and YouSee can commercially benefit from sharing best practices and collaborate within product development, innovation and content. On a more technical level, we can reap several synergies by combining our networks in a complete Norwegian infrastructure based on fibre and coaxial cables. On the business to business market, we will over time be able to offer the same broad product portfolio as TDC Group in Denmark,” suggested Dilling.
Get’s CEO Gunnar Evensen, will continues in his position after closing of the transaction. When completed, he will lead the effort of designing the combined TDC and Get organisation to ensure optimal synergy realisation.
“TDC Norway and Get are a strong match and we are enthusiastic with all the new possibilities. We look forward to continue to develop the best and most user friendly products to our customers and together continue our expansion in the business market. With TDC as part of the team, we will become an even stronger company which will strengthen our position on the Norwegian market,” claimed Evensen.
TDC Group is acquiring Get from GS Capital Partners and Quadrangle Capital Partners at a price of NOK 13.8 billion (€1.68 bn). The acquisition will be debt financed and TDC will simultaneously adjust its dividend payout ratio to around 60 per cent of Equity Free Cash Flow which means that it will now expect a dividend payout at DKK 2.50 per share for 2014, whereas it has previously expected a dividend at DKK 3.70.
The acquisition is subject only to competition approval from the Norwegian competition authorities and it is expected to close in Q4 2014.